Pressure mounts on JSE and other emerging markets as US raises rates

Johannesburg - The JSE barely managed to close firmer on Thursday, as it trended mostly lower along with other emerging market economies.

Emerging market currencies including the rand traded under pressure, following the interest rate hike announcement by the US Federal Reserve.

The US Fed indicated a significant shift from its post-2009 financial crisis monetary policy, which could spell the end of quantitative easing.

The fears for emerging markets arise from the fact that this could result in capital flows out of risky emerging markets and into a less precarious US economy.

The rand weakened to a session low of R13.34/$ against the greenback as the US dollar was buoyed by the rate hike.

The local currency did recover during the day to trade in positive territory, but gains were short-lived due to positive US economic data.

After reaching a session high of R13.10/$, the rand retraced to trade at R13.31/$ at 17:00.

Local mining production data also disappointed as it contracted by 4.3% year-on-year, worse than the estimated -3.6%. Month-on-month manufacturing production shrank by 2%, worse than the forecast of -0.4%.

On the JSE, Stadio Holdings [JSE:SDO] jumped 5.26% to close the day at R4.40 per share, while Pioneer Foods [JSE:PNR] posted gains of 4.41% to end the day at R113.29 per share.

Platinum miner Northam Platinum [JSE:NHM] closed 4.2% firmer at R35.74 per share, while its sector peer Impala Platinum [JSE:IMP] gained 4.69% to end the day at R23.00 per share.

On the blue-chip index, Mr Price [JSE:MRP] closed at R245.00 per share after leaping by 3.23%, while Shoprite [JSE:SHP] firmed by 3.14% to close at R237.00 per share.